Skift Take

Take a look at last year's hotel CEO compensation tables. The top bosses did well, and why not? Navigating the pandemic was tricky. Yet there was a wide disparity in the pay between most CEOs and workers. That's harder to defend.

Rob Goldstein, CEO of Las Vegas Sands Corp., was last year’s best-paid public hotel company CEO. Goldstein’s compensation was $31 million.

Mark Hoplamazian, president and CEO of Hyatt Hotels & Resorts, was the second-best compensated hotel CEO in 2021. He earned $24 million in total compensation.

Goldstein and Hoplamazian led the CEO pay tables during a tough year for navigating a choppy pandemic recovery. They also led an eye-raising pattern of CEOs making many multiples more than the average hotel worker.

As with other hotel CEOs, Goldstein’s and Hoplamazian’s compensation packages were heavily weighted in stock and option awards, which vest over time. The amounts are estimates companies made for U.S. financial regulators. Ultimate payouts may vary depending on how the stock does.

The fact Goldstein led his peers in pay makes sense in light of his negotiation of arguably the biggest property deal of the year. Las Vegas Sands sold its Las Vegas properties — The Venetian Resort Las Vegas and the Sands Expo and Convention Center — for about $6.25 billion to Apollo Global Management and Vici Properties.

Hoplamazian, in turn, led Hyatt through the largest acquisition in its history with a $2.7 billion deal to acquire Apple Leisure. Given this outsized deal, one could argue the executive arguably deserved to be ahead of his other hotel peers in compensation.

Given that Hyatt had a net loss of $222 million last year, its board couldn’t easily tie Hoplamazian’s compensation to hitting net income goals. So Hyatt’s board instead emphasized strategic priorities in 2021 when setting its incentive plan. These included cultivating the best talent, driving guest personalization, and concepts like “grow with intent.”

Hyatt’s executive team broadly hit the metrics tied to these goals, the board said in its financial filings. The board gave credit to management for hitting an adjusted earnings target.

See the chart below outlining the 2021 compensation for hotel CEOs. We focused on well-known hotel companies, and we overlooked real-estate investment trusts that own hotel assets.

CEOHotel Group2021 Pay (all in)
Robert GoldsteinLas Vegas Sands Corp.$31 million
Mark HoplamazianHyatt Hotels & Resorts$24 million
Christopher NassettaHilton Hotels & Resorts$23.3 million
Thomas ReegCaesars Entertainment Group$22.5 million
Anthony CapuanoMarriott International$18.4 million
Geoffrey BallottiWyndham Hotels & Resorts$18.2 million
William HornbuckleMGM Resorts International$13.2 million
Matt MaddoxWynn Resorts$12.9 million
Patrick PaciousChoice Hotels International$11.2 million
Sébastien BazinAccor$4.9 million
Keith BarrInterContinental Hotels Group (IHG)$3.9 million
Alison BrittainWhitbread$2.6 million

Originally reported in local currency and any dollar conversions are estimated. IHG figures are based on the full workforce, including hiring through third parties, and its CEO’s total figure of remuneration excludes a relatively modest variable award. Side note: In early 2022, Matt Maddox left the CEO role, and Craig Billings became CEO. Alison Brittain plans to leave the CEO role. Source: SEC and other financial filings.

Hotel CEO pay packages start with a salary, obviously. Yet compensation also includes a mix of extras that, together, amount to much more. A yearly bonus, a package of long-term share awards, extra help with pensions, and so on make up most of the average hotel CEO’s pay.

At the dozen leading hotel companies last year, total compensation for CEOs had a median figure of $18 million.

Hotel CEO pay was higher than airline CEO pay. Last year, the highest-paid airline CEO in the U.S. was Delta’s Ed Bastian — at only $12.4 million.

Hotel CEO pay was also higher than what’s typical at many businesses. A U.S. study by the Institute for Policy Studies of 300 publicly held companies across industries found that the average CEO pay was $10.6 million last year. A Wall Street Journal analysis of more than 400 companies using MyLogIQ data found an average of $14.7 million in pay.

Hotel CEO Pay in 2021

It intuitively makes sense to hand a CEO top pay to cope with bad times or to reset a poor strategy.

But some critics argue that the inverse should also be true. Top bosses who expect extra stock awards while rescuing companies should take a cut when their task becomes easier in good times.

While some hotel CEOs gave up their salaries during the pandemic, total compensation, thanks to long-term stock grants and other awards, didn’t drop much. We’re also unaware of any hotel CEO who has asked for their total compensation to drop after navigating the choppy rebound.

Today the ultimate decision on CEO pay lies with investors. In good news for CEOs, shareholders who voted on compensation packages have voted to support high executive pay, finding that it’s in line with company performance. Credit where it’s due: Navigating a pandemic and its recovery has been one of the toughest challenges hotel CEOs have faced in decades.

Hotel CEO Pay Ratio Versus Employee Pay

In our list of CEO pay at the dozen largest parent hotel companies, we found that the median ratio of CEO pay to average worker pay was 442-to-1.

CEOHotel Group2021 Pay (all in)Compared to Staff (other than the CEO)
Robert GoldsteinLas Vegas Sands Corp.$31 million866x median for staff, $35,879
Mark HoplamazianHyatt Hotels & Resorts$24 million665x median for staff, $36,186
Christopher NassettaHilton Hotels & Resorts$23.3 million631x median for staff, $36,915
Thomas ReegCaesars Entertainment Group$22.5 million634x median for staff, $35,618
Anthony CapuanoMarriott International$18.4 million506x median for staff, $36,505
Geoffrey BallottiWyndham Hotels & Resorts$18.2 million505x median for staff, $36,102
William HornbuckleMGM Resorts International$13.2 million379x median for staff, $34,988
Matt MaddoxWynn Resorts$12.9 million294x median for staff, $44,048
Patrick PaciousChoice Hotels International$11.2 million83x median for staff, $134,099
Sébastien BazinAccor$4.9 millionN/A
Keith BarrInterContinental Hotels Group (IHG)$3.9 million65x median for staff, $54,689
Alison BrittainWhitbread$2.6 million105x median for staff, $24,803

Originally reported in local currency and any conversions are estimates.

In comparison, the U.S. study by the Institute for Policy Studies of 300 publicly held companies found that the average pay gap between CEOs and employees was 670-to-1.

Contrast both ratios with the trend in 1978, when the CEO-to-average-worker ratio was 30, according to a report by Lawrence Mishel and Julia Wolfe of the Economic Policy Institute

Has running companies really gotten roughly 15 or 20 times as hard, and deserving of roughly 15 or 20 times as much compensation, over that time? Shareholders who vote on compensation packages apparently believe that what matters most is encouraging a strong stock performance, which the executives have done.

hotel

Daily Lodging Report

Essential industry news for hospitality and lodging executives in North America and Asia-Pacific. Delivered daily to your inbox.

Show Me More

Tags: ceo pay, future of lodging, hotels, hyatt, las vegas sands

Photo credit: Las Vegas image taken for Skift by Thanos Panagiotaros. Source: Skift.